ticking down to the compromise. that's a big question leading into tomorrow, and the answer is they need democrats here. >> if you think at home this is washington gobble degook it matters to you, could be higher interest rates, your mortgage, other things. hope to see you tomorrow night. hope to see you tomorrow night. "in the arena" starts right now. -- captions by vitac -- www.vitac.com good evening, welcome to the program. i'm don lemon. our top story, a day of dramatic confrontation in the murdoch scandal. british lawmakers grilled rupert murdoch and his son james for hours and hearing televised all over the world. murdoch's media empire has been rocked by accusations of police payoffs, phone hacking and corruption at his british newspapers. and troughout the hearing, all of the charges kept coming back to one central question. take a listen.

>> do you accept that ultimately, you are responsible for this whole fiasco? >> no. >> you are not responsible? who is responsible? >> the people that i trusted to run -- and then maybe the people they trusted. >> the murdochs did their best to distance themselves from the worst allegations, but the question still remains what exactly did they know? and what actions did they condone? one lawmaker thinks they know more than they let on. >> are you familiar with the term willful blindness? >> mr. sanders, would you care to elaborate? >> it is a term that came up in the enron scandal. willful blindness is a legal term. if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible. >> mr. sanders, do you have a

question? respectfully, i don't know what you'd like me to say. >> my question is are you aware -- >> i'm not aware of that particular phrase. >> now are you aware of the term because i've explained it to you. thank you, mr. chairman. >> we were not ever guilty of that. >> it got more interesting. at one point, the hearings turned chaotic as a man attacked rupert murdoch with a plateful of shaving cream. >> oh, oh! >> i want you to take a look at this again. you can see on the far left of your screen someone breaking out of the seats and heading straight for rupert murdoch. the first to act? his wife. who comes out swinging. you see her to the left of your screen there his son, james and a police officer seem frozen in action. murdoch may not have the reflections he once did, but he was still able to dodge some verbal attacks today.

we'll go indepth on the murdoch hacking scandal tonight. first, here are other aspects of the story we're drilling down on tonight. the fall of scotland yard? britain's beacon of law and order, rocked by allegations of bribery. top brass resigning in disgrace, and today, a stunning breach of security. time to call in sherlock holmes? and death of a whistle blower. sean hoare lived the tabloid life to the limit. drugs, booze, and cell phones. that's how he got his sensati sensational stories. looks like he saved the best one for last. then, news corp. and politicians, we've seen the cozy connection in britain, but here in america, for political contributions, you'll never guess who gets the most murdoch money. back now to our in-depth report, the murdoch hacking scandal and a key question, how deeply involved were the police and exactly why did they shut down their original phone hacking investigation back in

2007? my guests tonight worked with murdoch as senior editor for the times of london and has insider's knowledge of the close or perhaps too close relationship between the police and the tabloids. welcome, nicholas waptchak. i want to get to the hearing, but this was fascinating to watch. >> i can't think of anything that was so gripping and on the expectation that something new was going to come out the murdochs wriggling on the end of the hook. >> once the police investigation closed in 2007, that was it. do you think news corp. executive has some hand in closing that investigation? were they influential in that? >> it's very difficult to know in entirety. it's difficult to abandon the case in the beginning. what we do know, the senior policeman in charge of that investigation, ended up first of all being smeared with

information about his private life. we'd like to know i guess where those rumors came from in the first place. he was headed up on on people that find out dirty tricks about people, and then shortly afterward, he was given a column on the london times. a column he still has today. >> right. >> so this guy, the man who called off the investigation is the man who is now employed by the sister publ kagz of the vcp. don't you think rupert murdoch mipt have asked this single question, how come this guy is now being paid? >> sometimes it's a too-close relationship. but a tackled web of the same people working for the police department, then go into government and then work for news corp. >> absolutely. a revolving door. it turns out ten people in the public relations department of scotland yard that came from news international.

the people that used to give -- report tips is the person who ended up giving tips, and who pays whom? in a way it doesn't really matter this is sort of chump change. the actual details of who was paid. the fact is, they were same personnel going round and round. >> round and round. did you see that? >> no, i didn't. the london times has been kept insulated from many of the tabloid tricks that the sun and nuftz world were up to? >> what is it like to have a working relationship with rupert murdoch? is he the same man you knew? the same person with all of his faculties? >> i was rather saddened today. he's 80 years old, and he has been dented. he looks like someone has come across him with a cricket bat or baseball bat. in australia, cracket bat. he looks very down in the dumps. most humbling day of his life. a very low point of his career. >> yeah. >> on the other hand, it's difficult to feel entire

sympathy for someone who can give it out but can't take it. 1980 is when i met him so over 30 years i've known him. he's always been the cock craw on the marquee. strutting around and doing pretty well, with a combination of personal charm, but he has an organization that spends it's whole time looking into dirty little secrets of politicians, and every time he needs a business favor done, lo and behold, politicians fall in with his plans. >> he mentioned thousands of employees he has around the world. does it surprise to you he seems so out of touch with the organization, especially when you're paying so much money to make things go away? is this -- i was watching saying the emperor has no clothes. >> this doesn't ring true to me. he made great play that only 1% of news corp.'s business came from news of the world. and he blamed everybody else. he wasn't told.

he delegated power and people abused him. the fact is that he delegated large parts of his empire, he delegates to tv which he doesn't particularly understand. he moved to beverly hills and came back with his tail between his legs. he's very bad on online. and he bought myspace, a very peculiar thing. but when it comes to newspapers, he loves newspapers. >> is that because of his father? hang on, he spoke about his father. stop, i want you to watch it. >> i just say i -- perhaps addressing -- i just wanted to say that i was brought up by a father who was not rich, but was a great journalist. and he just before he died bought a really small paper,

specifically he said give me a chance to do good. i remember what he was so proud and he was hated by many people in this country for many years, which was expose the scandal. which i remain very, very proud of. >> so i'm wondering, since his newspapers are such a small part of the business and a time when newspapers are losing really their profitability, he hangs on to them is this his motivation? his father, to be in the media business? hang on to the newspapers and become this wealthy? >> i wouldn't like to speculate entirely upon the relationship with his father, because it's a complex one. here today he spoke very affectionately about him. his father, sir keith, was a real establishment figure. he was knighted, old money. they were pillars of community. but somewhere along the line,

rupert decided not to be old money and he decided to be an out cider. when he went to britain, he hated the very people that his father came from, if you like. he hated all those landed people, the moneyed people, that did so well purely because of their families and actually, he runs one of the tightest-knit family organizations in the world. >> but if you listen to him, my father was poor. he sort of alluded to that, and i built this from nothing, but that's not exactly -- >> not quite. there's no doubt the story of news corp. is astonishing, he inherited -- he was at oxford when he died and inherited a small newspaper in adelaide. >> you said it's over in the uk. it's over. >> i don't think he quiets gt q it yet. the influence that the murdoches have had. the way he managed to advance his business empire by heavying

up on politics. these are newspapers which use personal stories of the most i'll have kind very often in order to humiliate people in power. in a way, of course, he's right. all journalists should give people in power hell. but the motivation in this case turns out to be slightly different. what he doesn't get, actually people in britain are just sick of it, and that pie in the face, you know, i think in america, why is a poor old man getting a pie in the face? a lot of people in america will feel sorry for him. not in britain. >> i kept watching it today, thinking citizen cane. thank you very much. a pleasure. still ahead tonight, tony blair's press secretary with a behind-the-scenes look at how the murdoch media empire had britain's most prominent politicians battling for its

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launch my watchlist -- a popping stock catches my eye. pull up the price chart. see what the analysts say. as i jump back, streaming video news confirms what i thought. pull the trigger -- done. i can even do most of this on my smartphone. really, it's incredible. like nothing i've ever experienced. unleash your investing and trade free for 60 days with e-trade. rupert murdoch was not the only one to appear before parliament today. rebekah brooks, former editor of news of the world testified.

she was arrested sunday amid allegations that the tabloid was paying off police. she this wasn't the first time she was questioned. police payoffs have come up time and time again over the years. i'll play her testimony from today in a moment, but let's look back at what she had to say back in 2003. >> can i just ask of whether you ever pay the police? >> excuse me? >> do you ever pay the police for information? >> we have paid the police for information in the past. >> and will you do it in the future? >> it depends on -- >> we operate within the code and within the law. there is a clear public interest, and same holds for private detectives, subterfuge, whatever you want to talk about. >> it's illegal. >> no, no, no. as i said, within the law. >> over the years, brooks has tried to back away from that testimony. but it came up again today when the former editor was asked to clarify exactly what she meant by the statement. here is what she had to say. >> i can say that it -- i have

never paid a policeman myself, i have never sanctioned or knowingly sanctioned a payment to a police officer. i was referring if you saw at the time of the home select committee recently, have you various crime from fleet street discussing that payments have been made to police officers. i was referring to that wide held belief, not wide held practice. in fact, in my experience, the information that police gives to newspapers comes free of charge. >> all right. well, that seems like more than just a clarification. more like a contradiction. but believe it or not, the alleged police payoffs may not be the scariest part of this story. these very newspapers, the same one as excused of payoffs and hacking are also seen as vital allies for any politician to win an election and that's led to what some call a poisonous relationship between the elite and the media and the

politically powerful. brooks was asked about her close relationship with the prime minister. >> i'm afraid in this -- in this current climate many of the allegations that are putting forward, i'm trying to answer honestly, but there is a lot out there that -- that just isn't true. in particularly around this -- this subject and my relationship with david cameron. the truth is that he is -- that he is a neighbor and a friend, but i deem the relationship to be wholly appropriate, and at no time have i had any conversation with the prime minister that you in the room would disapprove of. >> my next guest says there is nothing appropriate about the relationship between the british media and politicians. and he should know. he was press secretary for former prime minister tony blair. i spoke to him earlier from london. we talked about that so-called

poisonous relationship. but first, i asked him how he thought murdoch handled the hearing today. >> i think what people may be a bit surprised by in terms of his whole town before the appearance of the mp" parliament, was the sense of almost being divorced from a lot of the events have been convulsing part of his company, an important part of his company here in the uk and the metropolitan police and the british government and the british political system. and yet even questions you really would have thought he would have answers to, he didn't. one point, for example, at which somebody raised -- run of the mps raised a previous select committee report into activities at his newspaper, and he honestly looked like he was being informed about this for the first time in his life. and i think people will be quite surprised by that, and i thought with james as well, although he was clearly much more on top of the detail, that he too, there are areas where frankly he

should have had more to say and more on top of the details. >> do you have any examples of political influence by rupert murdoch or anyone who worked for his companies to political leaders, tony blair or any political leaders? >> a conversation i remember we had with paul keating when he was prime minister of australia, and he used to say that you could do deals, but you never said the deal was being done. and murdoch talked about after the last election, he went around to see david cameron, because david cameron wanted to thank him during his coverage of the election, when rupert murdo murdoch's papers had supported his political party. at the time, we didn't think that important because of the bskyb takeover. there has always been a close relationship between politics and media i hope what emerges an

understanding, we have i better, healthier system if the politicians could do their job without fear or favor. when the relationships get too close, that becomes difficult. >> i want to talk more about the relationship between the press, political leaders and police. you were at rebecca brooks' wedding. i want you to tell me about the interactions and who else was at that wedding? >> who else was there? gordon brown was there. prime minister. david cameron, leader of the opposition. giorgos born, chancellor. a lot of main medias were there. and piers morgan, who has gone very quiet on this issue. he was there as well. >> piers morgan has spoken about it, has done a show about it, he has not been quiet on it. >> okay. okay. >> david cameron is speaking to parliament tomorrow. can he survive this? >> i don't have any doubt about that, but i think he would be in a much stronger position if he came out and admitted he made an

error of judgment in hiring andy coulson, the editor of news of the world when the known phone hacking was going on, as his communications director, and he's now sort of busy saying i wanted to give the guy a second chance. he's the prime minister, not a probation officer and there are lots of people in the world that would like to get a second chance for things they've done. that is not the point. the point is his judgment, in appointing somebody to that position, when saying this is not going to go away. too many unanswered questions for news international, for the police after the first inquiry, a complete joke, and also now for david cameron himself. >> allister campbell, thank you. >> thank you. >> i want to bring in cnn legal analyst, frank toobin. and former cnn washington bureau chief. guys, we have been talking about this cozy relationship between the press, how powerful they are

in britain if they are that cozy, a lot more people here, a lot more guilty parties than the handful that have been arrested or the murdochs, right? >> that's the danger. part of the iceberg you see suggests there may be a whole lot more under the water. imagine if andy coulson was at the white house and we had this going on in this country or something like that. and you have the fbi is filled with people who are refugees from this organization that has been so out there in pursuing the indiscretions of the rich and famous and powerful. we don't really know where this is employigoing to go. and it can undermine journalism and political discourse. a fascinating and amazing thing. >> the week before the iraq war, tony blair spoke to rupert murdoch three times. that's -- that's juice. that is power. you know, rebekah brooks'

wedding, both the prime minister and the leader of the opposition, these are powerful people. no comparison between how powerful journalists are there and how they are here. >> like having the president come to your wedding. >> and the leader of the republican party as well. i don't think that would happen here. >> all right. all right. jeffrey, frank, thank you very much. much more to talk about. don't go away more on the murdoch hacking scandal, right after this. [ male announcer ] introducing the ultimate business phone --

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more now on our in-depth report. the hacking and briarry scandal consuming rupert murdoch's media empire. guys, before we get back to our discussion, i want to play you this sound bite of rupert murdoch today, being pressed on claims that his staffers bribed police. take a listen.

>> did you or anyone else at your organization investigate this at the time? >> no. can you explain why? >> i didn't know of it. i'm sorry. i -- do you want allow me to sa. this is not an excuse, maybe an explanation of my laxity. this is less than 1% of our company. i employ 53,000 people around the world who are proud and great and ethical and distinguished people, professionals in their life, and perhaps -- and i'm spread watching and appointing people in my trust to run the divisions. >> almost painful to watch him struggle there. seems like he is trying to dig himself out of this mess,

jeffrey. >> it was fun to watch his wife, because you can tell she was kind of embarrassed by that answer. she's like stop digging yourself a hole there. the idea that rupert murdoch kind know what was going on because he was so busy. it's not that he was watching the simpsons. he doesn't care about the simpsons, even though it's a fox product. he cares about newspapers. and it wasn't just one mistake this newspaper made. they hacked thousands of different people. that's what record shows. thousands of people this was how the news of the world reported the news. by hacking people's phones. so the idea that he didn't know about it, just seems preposterous to me. >> similar question, frank. can murdoch really see responsibility here for wrongdoing? can he be this hands off, this unaware? >> not in the industry that he's supposed to be in, in journalism. let's just step back for a moment and think about what he's just said. that he was unaware that one of

his most high-profile, public, journalistic properties, if you accept news of the world is journalistic, is accused of bribing police, and he says he didn't about it, nobody brought about it. does that make sense that a ceo shouldn't or wouldn't know such a thing? a similar moment later on in the testimony when his son, james, talking about the 700,000 pounds paid off to the -- to the footballer association head, who was -- who had his phone hacked and, you know, started a lot of this, and he said he made that payment, that $700,000 pounds without taking that to his father, to the ceo. you're paying somebody off whose phone is illegally hacked and you don't tell the ceo? i don't get it. >> if he didn't know any of it, is he still culpable? >> it's not a criminal defense. i think in fairness to the murdochs, i didn't see any

evidence of any violations of american criminal law. but the real issue is does the board of directors of the news corp., which is famously sleepy and docile in the tool of the murdoch family, do they step in and say, look this family is ruining this company and they have to be replaced. >> let's be honest. if today wasn't a wakeup call to them. do you think it was? everyone else was transfixed. >> this is their candy store. they own 40% of the voting stock, the murdochs do. so the board of directors nominally has power, but the murdoch family retains the real power. they are on the board and they could make a stink if they wanted. >> it's a public -- nominally public company, because the murdochs really have the control here and they'll get to decide. >> that's right. and you can't take away from the murdoch family what they created

here. this is an empire and a big, bad thing to rip that away. and we should say this. there have been plenty of other journalistic scandals in the past and the reason they've been scandals because people haven't done their jobs and run things up the chain of command and haven't been aware of them and whether that is jason blair at "the new york times" or problems cnn had the past with the famous tail wind situation, where people didn't know what they should have known, that's what happens. but at some point, people have to take responsibility and decide what kind of company they want to run and what they want it to be. >> i have never run a company, and you talk to the boss every time. usually the standard answer, i let them hire people, and let them do their thing, and stand back. in this day and age, when you have these sorts of scandals and so many people under you, and big conglomerations, you can't

be that hands off. you cannot not have clothes. >> i do think that a person who runs a big company can't be responsible for every big decision. >> but, listen, the buck stops with the person at the top. >> what makes this difference from say, tail wind, which many people may forget, a long time ago, a cnn documentary that had all sorts of problems and people lost their jobs over it. but this was a policy. this was how the news of the world reported the news. it wasn't just one aberration, and that is not something -- >> yes. >> and it was a policy. and there had been previous par will meant e -- parliamentary testimony. it was not some shrouded thing. >> compare this, frank to what happens here in the united states and what happened in parliament? is this more of a grilling than someone would get in the united states? >> no, no, no, no, no, no. imagine what would you have had

if this was a congressional hearing. would you have had outrage expressed. i didn't hear that. there were good, tough questions, but mostly questions that i thought the murdochs answered or dangled on. they weren't really grilling and drilling. >> i thought it was actually similar to a congressional hearing in that the politicians are really good at talking but not very good at asking questions. >> an interesting part that i -- it do we have time to play james murdoch? we don't. james murdoch would try to jump in for his father and save him and basically the mp would say, listen, i want to get back to your dad, because he's the one that's responsible for this. >> james murdoch sounded like he's been to too many tony robins seminars. we have to be proactive. we have a code of conduct. but there was no substance. he didn't know anything more than his father about the substance. >> dynasties are hard things to watch, especially when the king is 80.

you want to leave at the top of your game. and what was so painful about this, was watching rupert murdoch insistent, slow off the mark in some cases, either disconnected or willingly ignore ant about some things and 38-year-old sitting next to an 80-year-old. on so many levels this was very sad. >> 82 years old in that respect, i would say we should cut him some slack, not for the mishandling of this. he'll be a little slow. >> so he can retire. if he's -- anyway, i'm not inclined to cut him slack. maybe because i'm closer to 80 than you are. >> no. thanks to both of you. >> thanks. still adhere tonight, the house just voted on a plan to cut spending and balance the budget. we'll go to live to washington for the latest, next. d delir our next generation mobile broadband experience to 55 million more americans,

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breaking news to report to you tonight out of washington. the house has just voted on that

controversial cut, cap, and balance bill. i want to bring in kate bawlold. explain what this bill is and its meaning or lack of moaning? >> absolutely, don. to give you an update. 234-190. a largely party line vote. not a surprise to anyone watching this debate this is cut cap ballmer, that is supported by house republicans, specifically pushed by conservative members. it would dramatically cut spending and strictly caps any future spending and this is the important part to this debt ceiling debate it would make raising the debt ceiling contingent upon the congress passing a balanced budget amendment to the constitution. a very tall order. and what happened just now, what we kind of all expected to happen. the house passed this measure, but the reality is, it's not going to go anywhere. because this is not -- this measure is not likely to pass a democratically controlled

senate, and even if it did, president obama already said he would veto the measure. this tonight is becoming a largely symbolic vote for house republicans, allowing them to show constituents that they support much deeper spending cuts, more stricting spending caps than is likely to be part of any compromised bill going forward, don. >> kate bolduan, thank you so much. joining me now is chief political analyst, gloria borger and jessica yellen. this has been called posturing, kabuki theater. is this all it is? >> it is a lot of theater. house republicans want to go on the record saying they are voting for a balanced budget amendment, if in the end the debt ceiling gets raised without the amount of spending cuts they might have liked. so this is something i think that the leadership believed it had to do, as sort of step one

to get to the final step of getting the debt ceiling through in one way or another. and i think we kind of heard the president say that today a little bit when he came out and said, okay, do what you have to do, but do it quickly so we can get on to the important stuff. make your political points, but we've got to get this debt ceiling done. >> let's move on. jessica, where do we go from here? >> well, the white house is expecting that after this, they can start negotiating or hoping with the house republic an leadership, whether it's to move on to one of the other deals they have been talking about, or more likely, the reid/mcconnell plan, the last option to raise the debt ceiling and those conversations will either begin tonight or tomorrow, and that -- it has to move quickly. the one other point i would make here, don, that i find fascinating is michele bachmann, the republican presidential

candidate, known as a tea party activist voted no tonight. >> what does that say? >> that says there are so many cuts in this that someone in her campaign or she herself has calculated that this is not going to ultimately be popular with enough of the american public, to be a successful candidate she can't go on record supporting this. >> or conversely it's not conservative enough, jess. doesn't call for the repeal of health care reform and all the rest. >> that's true. that's another way to see it. >> it could be -- it could be -- they are not mutually exclusive. it doesn't go far enough, and on the other hand, let's protect ourselves. >> does this vote give speaker john boehner any room to maneuver? can he get his party to play ball on this vote? >> i'm not sure even he knows the answer to that question. i think this is one way of herding the cats. and getting them to the finish

line, and over the finish line, and i think this is something they believed was kind of a prerequisite. it allows a conservatives to kind of let off some steam and be able to say we voted for this, and i think it's something that he felt he really had to do to allow them to say i voted for a balanced budget amendment. i think it will help him in the end. but does it guarantee anything? absolutely not. >> gloria, you said you think it was too conservative. this cut, cap, and balance plan. and that may be why michele bachmann didn't vote for it. >> maybe not conservative enough. not conservative enough. >> is there any part of this cut, cap, and balance plan that can be incorporated into a final deal then? >> no. >> this wasn't the final deal. >> go ahead, jess. >> this is something for the

conservatives to go on record and say this is something we'd like this is where we stand. >> is there any part of this that can be incorporated to the final deal they make? >> some cuts. some of the cuts. >> some cuts. but these cuts -- >> gloria, go ahead first. >> go ahead, jess. these cuts are big. they are really big and so it wouldn't be on this scale at all. >> okay. so, jessica listen. time is running out here in the u.s. if we default on the august 2nd deadline, if we don't come up with it to raise the debt ceiling, what realistically can lawmakers pass in this time? not a lot of time left. >> the likely option, the reid/mcconnell plan, being worked out in the u.s. senate right now, it will have to -- it's nobody's ideal option. it's not even necessarily going to please some of these ratings agencies that grade our credit. but it will get the debt ceiling raised and could get done in the amount of time we have left and

that seems like the final fallback position for everybody. >> all right. gloria, the final word here. >> well, just to follow up on what jess is saying, i was talking to a senior republican today who described this backup plan as kind of the break glass kit, when have you an emergency, you go and break the glass, you pull it out, and you have something there to put out the fire. and i think they'll have to break the glass. >> gloria and jessica, thank you. >> sure. just ahead, the political fight and the toll it's taking on all of the parties involved. all-star political panel weighs in, next. ab e my weighclass. but i did. they said i couldn't get elected to congress. but i did. ♪ sometimes when we touch ha ha! millions of hits! [ male announcer ] flick, stack, and move between active apps seamlessly. only on the new hp touchpad with webos.

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now to the debt ceiling. the president has said that friday is the deadline to resolve the fight there is time to take care of all of the details. tonight, that deadline it seems to face an almost impossible outcome. joining me now is ari mel burn, a correspondent for "the nation" and nicole wallace, author of a novel, "eighteen acres." this cut, cap, and balance act, the president said he will veto it. i want them to have their moment. so why -- shouldn't they be in a room, nicole, working on things, instead of doing something that doesn't have a chance of passing? instead of leaving the american people in limbo? >> there are some people in a

room. including senator tom coburn and the gang of six working on this problem a long time. there is a long history in washington of both parties taking principled stands when it's something truly near and dear, and i remember working in the bush white house during the wars in afghanistan and iraq, plenty of democrats took principled votes against war funding, whatnot. and there was no chance we would ever cut off funding for the troops on the battlefield. but i don't remember the press indicting those principled stands the way they seem to be indicting republicans taking a stand for smaller government and before we single out for criticism the tea party members of the house republican caucus, they believed they were truly sent there to shrink government and lower taxes. >> listen, i understand all of that, but when you have a deadline. that's what i'm saying. a deadline is a deadline. this show goes on air 8:00 p.m. eastern. i can't keep pushing the thing back. i'm not going to go on the air until i get this. either i do it or i don't when there is a deadline.

>> don if you were having your show run by this elements of the tea party, they would be back staij telli stage, no, we think it will be fine, we can put it back until 8:30. there won't be black air on the tv. somehow it will work out. they would say things that are not true, and that's where i really strongly disagree with nicolle. i think her heart is in the right place. you don't want the united states to default on negotiations. when you worked for president bush, he got it raised seven times. >> without barack obama's vote. >> and if that's the case, the people who voted against it, trying to have us default on our credit were wrong, and that's the problem. >> let's stop talking about this side of the aisle and that side of the aisle. let's talk about compromise. everyone i speak to, there is no room for compromise. >> there has to be. maybe this is why i write fiction these days. there has to be, and i think that's why you see the gang of six being cheered on by

president obama, who i think is still -- i think we should admire anyone in washington who is still trying to do something big and i thought it was a great disappointment when we went from this as pairational talk only a week ago, doing a $4 trillion deal, to everything falling apart. >> the reason i asked this question, let's put up this poll. it shows a full 2/3 of people saying they want both. they want cuts and they also want revenues or taxes. so they want a compromise. but -- >> but i'm sorry. but this is one of those situations where we can't just -- as jon stewart says we can't just leave it there and pretend there is an equal kind of split. what you see is democrats more than the median voters want compromise, and the democrats led by some people who aren't looking out for the long-term interests of the united states and our credit are driving us up to the brink, there are areas we can cut spending, but not like

this. you just had a prior segment about the proposals looking at tonight, the cbo, the congressional budget office, won't even have time to score these before we vote on them. that's not how you reach a reasonable compromise, when you can't get factual numbers. >> i want to know if we're having the wrong conversation here. you tweeted me the link to your article. and i found this line very interesting. pew estimates 85% of economic coverage, talking about in the media, is about the debt battle, not the unemployment and recession that form the real threat to most americans concerned about the economy. should the real talk be about jobs, jobs, jobs and not debt and deficit? >> yes. we're in a real jobs crisis. and one place where republicans have a legitimate criticism about this administration, they haven't found the jobs. they need a job boom. jobs right now are far more important than a manufactured, fake, republican tea party debt

crisis. >> a quick followup for you. >> the debt crisis is in large part because of the massive government spending we saw under president obama and the reason he doesn't talk about jobs is because he hasn't created any. his spending has made it harder to create them. the burdens he placed on employers in this country, massive health care mandate that he placed on every employer in america, these things cost him democratic control of the house. he is in the situation he is in, because he has made the economy so much worse. >> so they are equally important? >> i think jobs are more important to people sitting at home. 20 million americans unemployed or underemployed would say jobs are more important. this is about incompetence in washington this is a story about a broken washington. >> if you were advising the candidates, many of whom are saying i'm going to not -- michele bachmann, not going to vote to raise the debt ceiling and talking about deficits, would you advise them to talk more about creating jobs and debt and deficit?

>> i think if you were to watch any of them on the trail in iowa or new hampshire, i bet that that's what the bulk of their conversations are about, and i bet that's why you don't see them pull too deeply into this debate. this is not where the grassroots republicans voters are. this is a no brainer for grassroots republicans. federal government is too big, we should do everything we can to shrink it. it's important to give republican legislators credit. they are talking about how we find a way to make sure america doesn't default. >> my last question to you is what happens now? is this gang of six, do they go back to the drawing board? and why should the american people even have confidence that something is going to get done by the deadline? >> we should have confidence the ceiling will be raised by the deadline, because, a, cooler heads will probably prevail. and, b there, is a financial interest in the republican party to tame some of this fantasy talk that it's okay to default.

it's not okay. number two to our question, if you look at the nine-page plan. i have it here in my hands. what you see in the senate plan is a lot of kicking the can down the road. another area where i think nicolle and i will agree, that's going to be a fight. >> you're going to write fiction too one of these days. >> you are going to see him running for office. in this plan i have right here. >> could be waving around anything. it could be a takeout menu. >> what did you watch today? did you watch washington or london? >> i watched london? >> london. >> there you go. nicolle wallace, ari melber, thank you. campaign contributions from the murdoch empire in the good old usa and some politicians cashing in might surprise you. that is next. new citracal slow release... continuously releases calcium plus d for the efficient absorption my body needs. citracal.

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of these abandoned racetracks in america today. automotive performance is gone. and all we have left are fallen leaves and broken dreams. oh. wait a second. that is a dodge durango. looks like american performance is doing just fine. ♪ carry on. ♪

welcome back. at its heart are money and influence in great britain. last year, murdoch gave $1 million to the republican governor's association and much has been made how many gop candidates, newt gingrich, sarah palin, and mike huckabee wound up on the fox payroll. but the nonprofit sunlight foundation revealed that personal donations made by those working at news corp. tell a difference st